How To Improve Your Credit Score If It’s Under 650

We are all familiar with the tried-and-true pieces of financial advice: Put aside some funds for an emergency. Pay off your debts. Try not to spend more than you make.

Yet while you’re juggling all of the above, it can be easy to forget another important bit of wisdom: Keep your credit score as high as you can. While it may seem obvious, failing to manage your credit score can have a serious impact on your financial health. The higher your score, the more financial opportunities you gain access to.

So, what do you do if your credit score isn’t as high as you’d like it to be? Follow these five simple tips, of course!

This is exactly how to improve your credit score:

Ask for higher credit card limits

Let’s say you’ve been slowly but surely paying down your balance, but your credit utilization ratio (or the percentage of your credit that you’re currently using) isn’t going down as quickly as you’d like. If you’ve shown a positive track record with a particular creditor, or you’ve recently gotten a raise at your job, you may be able to ask for a higher credit limit! As long as you don’t actually use the additional credit and your balance stays where it is, this tactic lowers your overall credit utilization ratio, which boosts your credit score!

Consolidate your debt

By using a personal loan from a company like Credit Direct, you can consolidate your debt and boost your credit score at the same time. Not only does consolidation make paying off multiple high-interest balances more manageable by combining them into one lower monthly payment, but it also increases your credit score by getting rid of debts that could be weighing heavily on your credit history.

Add to your credit mix

Speaking of personal loans, even just taking one out can improve your credit score! This is because it increases what’s known as your credit mix – the different types of credit you currently have. Adding a new form of credit account and keeping it in good standing can work to increase your credit score. This should be done if you are able to make the monthly payments and have a good use for the funds. 

Pay bills on time

While all of the tactics we’re discussing here can help, it’s important to understand that nothing is more detrimental to your credit than paying your bills late. That’s because late payments will remain on your credit reports for up to 7½ years! If you find yourself unable to make a payment or if a payment is overdue by 30 days or more, get on the phone with your creditor as soon as possible. Work out a way to pay the outstanding balance and ask them if they would consider stopping their reporting of your missed payment to the major credit bureaus. 

Become an authorized user

If you have at least one friend or family member who’s a paragon of financial health—someone who has a 401k big enough to sustain them for years after retirement, a perfect credit score, and a house they fully own, for example—chances are, this person also has a credit card account with a long history of on-time payments and a high credit limit. If this is the case and you feel comfortable with them, ask them to add you as an authorized user to the account. When they do this, it adds their good account to your credit report, which helps your credit utilization. And, as a bonus, you’ll also benefit from their positive payment history! The best thing about this plan is that the account holder doesn’t even have to give you the account number or the card for you to start seeing your credit score improve.

Stay the course

As much as we’d all like to snap our fingers and magically increase our credit score, the truth is, there’s no quick fix. In fact, the best credit scores result from years of practicing good financial habits. While some of the strategies we talked about will cause an increase of 5-10 points fast, the most significant bump you’ll see in your score will take time. So the best thing you can do for yourself (and your score) is to put our tried and tested advice to work as the results of a higher credit score will come over time.

Interested in consolidating multiple balances to boost your score? Credit Direct can help! Check your rate on a personal loan in minutes with no effect to credit score. 

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